Penang’s hectic pace of development and changing population profile over the last few years have led to a rapid transformation in the property market, with new magnets for development and new trends in design and products

The current economic slowdown is seen by some experts as a welcome ‘breather’ for the Penang property market, which had been heating up rapidly in recent years. The last few years have seen the property market here evolving dramatically in response to changing lifestyles and market dynamics.

Seberang Prai – the new hotspot

One recent phenomenon is the shift in development focus from the traditional Butterworth-Prai area towards the Jalan Baru-Bukit Tengah-Bukit Mertajam corridor.

As noted by real estate consultants Izrin & Tan Properties Sdn Bhd (I&T), Central Seberang Perai looks to be the new magnet for residential developments. Recent years have seen the selling prices of newly-launched housing units in this hotspot racing to match the prices of similar houses in more established locations like the Butterworth-Mak Mandin-Raja Uda area.

Among the upcoming residential schemes being launched in this growth area are UDA Land’s Taman Pauh Jaya along Jalan Baru; Taman Aman By PPH Group and AMDB Berhad’s Bayu Mutiara in the Bukit Tengah area; and Parklane Residence and Aston Villa, an RM88 million mixed development project by Ivory Properties Group.

New high-end kids on the block

On the mainland and off, the market is seeing more high-end luxury homes than ever before. I&T’s Property Market Report 2007 reports that two-and-a-half- and three three-storey terrace houses are being launched with bigger built-ups, better design and services, and priced at new ceiling levels of RM300,000 to RM420,000 per unit.

Semi-Ds and bungalows, even in these times, are being put on the market at record highs of RM600,000 to RM1.2 million per unit.

Despite rising land prices and fluctuating prices of construction materials, Penang- and Klang Valley-based developers have not been deterred from establishing new property offerings, although some launches may be slightly deferred given the current economic scenario.

Still, the competition has been good; Penangites (both old and new) are now spoilt for choice in a way they never were before, with an array of high-end and innovatively-designed properties.

Globally marketable delights

Even before the intensive development of the last few years, Penang had already been long known as an attractive holiday destination and retirement haven. However, recent years had seen these features being marketed intensively not just to locals but also to foreigners.

Developers have been singing the island’s delights as a residential haven as well to potential buyers from overseas, particularly from Hong Kong, Japan, Indonesia, Singapore, India and the Gulf.

These shifting market dynamics and changing population profile and lifestyle have contributed to the state’s evolving property landscape. Aware of Penang’s high proportion of residents with old and new money, coupled with demand for trendy and high-end homes, developers have become that much savvy about selling beachfront and hilltop ‘resort lifestyles’ and not just houses and homes.

The island’s wealth of heritage and diversity is an identity embraced by developers for their projects, from landed properties to resorts and hotels (the current controversy over Georgetown’s UNESCO World Heritage Site status notwithstanding).

Time to rest and rejuvenate

There is no doubt that the current economic slowdown and the accompanying concerns are real, with the property scene experiencing spill-over effects not just in residential but also in commercial properties. Nevertheless, it has been widely reported that the current scenario is not as gloomy as the 1997/98 economic crisis.

The Star’s deputy news editor, Angie Ng in her recent column on Breather for Property Market, advises developers with good projects in the right locations and the financial means to support construction costs, should consider completing their projects before offering them for sale (The Real Estate, The Star, December 20 2008). Property buyers with surplus cash should shop around for the right property as, she advises, fixed physical assets make better investments than shares.

Ng also pointed out that the Penang property market, with its frantic pace of development over the last few years, had been in danger of overheating and could use some respite from the hectic pace of development. Taken this way, the slowdown can be a time to rejuvenate and bounce back with renewed vigour.